California to Rideshare Companies: Nobody Is Above the Law

California’s attorney general, along with a coalition of city attorneys, filed suit against Uber and Lyft this week, claiming the companies wrongfully classified their drivers as independent contractors in violation of a state law that makes them employees.

The rideshare companies are accused of flouting the law, known as Assembly Bill 5, requiring companies to treat their workers as employees instead of contractors if they control how workers perform tasks or if the work is a routine part of a company’s business.

Let’s make this clear: Regardless of how any individual feels about the law, these companies and others like them have chosen to operate illegally. 

At the root of all this is a business model privatizing profits and demanding the rest of us taxpayers cover the costs to society workers may incur as a result of being outside the system.

The intent of this legislation was to establish rules of the road following a State Supreme Court ruling (Dynamex Operations West, Inc. v. Superior Court) holding that most workers are employees, ought to be classified as such, and the burden of proof for classifying individuals as independent contractors belongs to the hiring entity.

At least one million gig workers in the state are impacted by the law, giving them a path to benefits like a minimum wage and unemployment insurance that have been traditionally not included for independent contractors.

From the New York Times:

• “Uber and Lyft are traditional employers of these misclassified employees. They hire and fire them. They control which drivers have access to which possible assignments,” the lawsuit says. “Uber and Lyft are transportation companies in the business of selling rides to customers, and their drivers are the employees who provide the rides they sell.”

• Because ride-hailing companies and app-based food delivery services do not employ drivers, they avoid the costs of insurance and vehicle maintenance, sick leave and unemployment. But the coronavirus pandemic has exposed gaps in the gig economy, as drivers have abruptly lost their income and struggled to get unemployment insurance, or fallen sick without access to paid sick leave.

• “Uber and Lyft are breaking the law. We are going to put a stop to it,” said Dennis Herrera, the city attorney of San Francisco. “This pandemic just highlights the danger of the work these essential workers are doing.”

A court challenge to AB5 asking for an injunction preventing enforcement failed in February and legal experts believe it has little chance of succeeding at trial.

The companies and others like them like to downplay the weaknesses in their employee schemes by talking about “access” to health care and benefits. Like the Trump administration’s much touted plans to replace the Affordable Care Act, the specifics of their offerings are largely illusions.

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Various gig economy companies have pooled more than $110 million to back a new ballot measure exempting them from AB5. In return they’re making soft promises about paying drivers at least 20% more than minimum wage, plus 30 cents per mile to cover vehicle wear and tear. (The 2020 IRS standard for the deductible costs of operating an automobile for business is 57.5 cents, by the way.)

The companies say they’ll provide drivers a small stipend to cover health care costs and offer accident insurance. [The average monthly health insurance premium for an individual in California in 2019 was $576.]

https://twitter.com/LorenaSGonzalez/status/1258428525155020802?s=20

Meanwhile, a well-oiled astroturfing campaign is underway, saying “freedom” to schedule is the issue at hand, along with a social media campaign setting a new national standard for maliciousness.

[There is absolutely nothing in AB5 preventing gig economy companies from flexible scheduling.]

Somehow, we’re led to believe, everything was cool until AB5 came along. 

I’m guessing the 20,000 drivers for Uber and Lyft who lobbied for AB5 wouldn’t agree with that premise.

Setting aside the vitriol, there were/are problems with the law, namely including occupations with a long history of being outside the system. 

Now that the legislature is back to legislating, a package of amendments covering (among others) freelance journalists, musicians, and interpreters is expected to move forward. 

The time frame for these implementing tweaks has been extended by the pandemic and various bad faith actors, many of whom I believe were serving as fronts for the gig industry.

The gig companies campaign talking points always include vilification of labor unions and personal attacks on Assemblymember Lorena Gonzalez and/or her husband. 

• “In what world can you not pay your fair share?” said Lorena Gonzalez, a California Assembly member who represents southern San Diego and drafted A.B. 5.

Anybody is naive enough to think that labor unions --for all their faults-- are responsible for economic inequality and how tough it is to make a living should look at the overwhelming (and I mean overwhelming!) economic research to the contrary. 

If Assemblywoman Gonzalez tweets about collecting diapers for low income families, you can bet there will be a stream of invective portraying her as Satan incarnate. 

If County Supervisor Nathan Fletcher takes the point on San Diego’s response to COVID-19 virus, expect him to be slammed for not waving a pointer at the plight of the deprived gig economy worker.

It’s funny/not funny how these scripted social media attacks on AB5 supporters mirror those being used by anti-vaxxers and science deniers.

As the social safety net has been diminished and key services have become privatized, the vulnerabilities of those outside-the-system have increased. 

Sure, it sounds great to be able to work a schedule around childcare or other familial needs, but somewhere along the way the concept of society lending support to those endeavors has disappeared.

We now live in a society where the concept of “me” trumps the concept of “we.” This started back in the 1980s with trickle down based inequality and the fetishization of shiny new things. 

We’ve been here before --what Mark Twain called the gilded age-- living in a world where things glittered on the surface and were rotten underneath. The late nineteenth century included increasing anti-immigrant sentiment, massive corruption, ever-increasing wealth inequality, hyperpartisanship, terrorism, and open among the wealthy contempt for our democratic heritage.

It was not the “good old days” for the vast majority of people. And those defenders of the current system will end up learning a bitter lesson, namely that the companies they work for value profits over people.

This lawsuit is way overdue. And the ballot measure these purveyors of economic pain are pushing to undo AB5 will fail. 

If the consequences of the coronavirus crisis have taught us anything, it’s that most people are willing to act collectively for the common good.

And a very loud minority will bemoan their loss of freedom. 

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Email me at WritetoDougPorter@Gmail.com

Image Credit: Gerd Altmann by Pixabay